Blue Company began operations on January 1, 2019, adopting the conventional retail inventory system. None of...

3.6 Ratings (385 Votes)

(a)	Conventional Retail Method
		Cost	Retail
	Inventory, January 1, 2020	$38,200	$59,300
	Purchases (net)	$129,300	$178,900
		$167,500	$238,200
	Add: Net markups		$22,200
	Totals	$167,500	$260,400
	Deduct: Net markdowns		$12,900
	Sales price of goods available		$247,500
	Deduct: Sales (net)		$169,700
	Ending inventory at retail		$77,800

	Cost-to-retail ratio	64.32%
	($167,500/$260,400)
	Ending inventory at cost	$50,041
	($77,800 x 64.32%)

(b)	LIFO Retail Method
		Cost	Retail
	Inventory, January 1, 2020	$38,200	$59,300
	Purchases (net)	$129,300	$178,900
	Add: Net markups		$22,200
	Deduct: Net markdowns		$12,900
	Total (excluding beginning inventory)	$129,300	$188,200
	Total (including beginning inventory)	$167,500	$247,500
	Deduct: Sales (net)		$169,700
	Ending inventory at retail		$77,800

	Cost-to-retail ratio	68.70%
	($129,300/$188,200)

	Ending Inventory at Retail Prices	Layers at Retail Prices	Cost to Retail (Percentage)	Ending Inventory at LIFO Cost
	$77,800	$59,300	64.42%	$38,201
		$18,500	68.70%	$12,710
				$50,911

	Note:
	The cost-to-retail ratio considers for two-digit after the decimal.

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Other questions asked by students